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2 years ago

What's the present value of a perpetuity that pays $250 per year if the appropriate interest rate is 5%

Business

1 answer:

KengaRu [80]2 years ago

3 0

Answer:

PV of Perpetuity = $5000

Explanation:

A perpetuity is a series of cash flows that are constant, occur after equal intervals of time and are for infinite period of time or are perpetual. Thus, it is like and annuity but with an infinite time period. The formula for the present value of of perpetuity is,

PV of Perpetuity = Cash Flow / r

Where,

r is the required rate of return

PV of Perpetuity = 250 / 0.05

PV of Perpetuity = $5000

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You believe that you can earn 2% more on your portfolio if you engage in full-time stock research. However, the additional tradi

Korolek [52]

Answer:

the most spend on research will be $12,000

Explanation:

given data

earn = 2% more

trading costs = 0.5%

stock portfolio = $800,000

solution

we know that here net earnings due to research is expected is

net earnings due to research = 2% - 0.5 % = 1.5 % of stock portfolio

spend on research is = 1.5 % of stock portfolio

spend on research is = $800,000 × 1.5%

spend on research is = $12,000

so here when we spend more than $12,000 it end up in a net loss

so the most spend on research will be $12,000

6 0

2 years ago

Shannon signs a contract with tevin, an unlicensed contractor, to build a deck and gazebo at the rear of her house. this contrac

Bingel [31]

The answer is noone.

8 0

2 years ago

An FI has a $100 million portfolio of six-year Eurodollar bonds that have an 8 percent coupon. The bonds are trading at par and

PilotLPTM [1.2K]

Answer:

A. 823.74

B.$4,614,028.00 gain

C.-$4,629,629.63

D.$2,678,000

Explanation:

Np= Bond Portfolio Value/δ*B*D

=$100,000,000/-0.625*-10.1*$96,157

=823.74

Approximately 824 Contract

A $100,000 20-year, eight percent bond selling at $96,157 implies a yield of 8.4 percent.

∆P = ∆p * Np= 824 * -0.625 * -10.1/1.084 * $96,157 * 0.01 = $4,614,028.00 gain

∆PVBond= -5 * .01/1.08 * $100,000,000 = -$4,629,629.63

The price quote of $3.25 is per $100 of face value. Hence the cost of one put contract will be $3,250 while the cost of the hedge

= 824 contracts * $3,250 per contract

= $2,678,000.

8 0

2 years ago

Which of the following is the best example of a high-contact service?

nexus9112 [7]

Answer:

The correct answer is letter "D": Plastic surgery.

Explanation:

Services are activities offered to satisfy third parties' needs in exchange for compensation. High-contact services are those that meet uncertain demands and require a certain set of skills. Typically, high-contact services are expensive. Hospital and nursing assistance, legal or financial advice fall into this category.

5 0

2 years ago

Calculate the product of savings and growth_multiplier. Store the result in year1. What do you think the resulting type will be?

alexandr1967 [171]

Explanation:

growth_multiplier is 1.1

savings = 100

desc = "compound interest "

# Place product of growth_multiplier and savings to year 1

Year 1 = growth_multiplier* savings

# Print

print(type(year1))

Now,

# Place addition of desc & desc

doubledesc will be desc + desc

# Print doubledesc

print(doubledesc)

8 0

2 years ago